Could Cloud Computing Cost More?

NCOIC Discusses e-Discovery and Cloud Computing

By G C Network | March 22, 2010

Last week during its weekly meeting, the NCOIC Cloud Computing Working Group (CCWG) examined some of the legal aspects surrounding electronically stored information. With government use of cloud computing expected…

Take the survey, get a book!

By G C Network | March 20, 2010

“Cloud Musings”, in cooperation with Aditya Yadav & Associates, is conducting a new cloud computing survey. This short, eight (8) question poll, is designed to gauge general corporate plans around…

Army Knowledge Leaders Study Cloud Computing

By G C Network | March 12, 2010

This week it was my pleasure to explore cloud computing with Army Knowledge Leaders (AKL) ! AKL is an intensive 2 year experience of training and work rotations designed to develop leadership,…

Northrop Grumman & Lockheed Martin Selected for CANES

By G C Network | March 9, 2010

   Last week the US Navy awarded initial CANES contracts to Northrop Grumman and Lockheed Martin. Navy officials place the contract values at $775M for Northrop and $937M for Lockheed.…

NCOIC Analyses Cloud Computing With SCOPE

By G C Network | February 24, 2010

Last week, the Network Centric Operations Consortium (NCOIC) Cloud Computing Working Group (CCWG) started it’s work on cloud interoperability in earnest. The first step in their process is the completion…

TASER Awarded: The NGA ASP/ISP Transition Contract

By G C Network | February 17, 2010

The National Geospatial-Intelligence Agency (NGA) has awarded the Total Application Services for Enterprise Requirements (TASER) contract to: Accenture National Security Services, LLC BAE Systems Information Technology, Inc. The Boeing Company-Autometric,…

EuroCloud Expands Quickly

By G C Network | February 16, 2010

Last October I introduced EuroCloud as a pan-European business network with the goal of promoting European use of cloud computing.  In the intervening three months, the organization has grown to…

Joining NJVC: A Professional Plateau

By G C Network | February 8, 2010

This week I begin a new and exciting phase of my professional career by joining the NJVC Enterprise Management Team! For those unfamiliar, NJVC is one of the largest information…

DoD Deputy CIO on Secure Information Sharing

By G C Network | February 3, 2010

Today on Federal Executive Forum, Dave Wennergren, Deputy CIO, Office of the Secretary of Defense, shared his views on secure information sharing. Mr. David M. Wennergren serves as the Deputy…

Training Conference: Cloud Computing for DoD & Government

By G C Network | February 1, 2010

Please join me at the Cloud Computing for DoD & Government training conference, February 22-24, 2010 at the Hilton Old Town in Alexandria, VA. This unique conference agenda blends interactive…

In a recent conference, analyst William Forrest says that large companies could end up paying more than twice as much by using cloud based services. According to a Forbes.com report, Deflating The Cloud, a study focused on a McKinsey & Co. financial services client showed that the financial firm would be paying 150% more for cloud-based services versus owning the infrastructure.

“Much of cloud computing’s misplaced hype, contends Forrest, comes from the assumption that businesses that make the switch will be able to do away with their entire IT department, an expensive collection of personnel. But in his analysis of McKinsey’s financial services client, Forrest found that only around 15% of the company’s 1,700 or so IT employees had hands-on access to hardware and software–most worked in support or other administrative areas. That means moving to Amazon’s service would only cut about 200 full-time workers, hardly the savings chief information officers might imagine.”

Others, including Amy Wohl leading analyst at Wohl Associates, disagree arguing that Forrest’s analysis leaves out the value of avoiding large capital outlays and ignores the flexibility inherent in cloud computing.

This is actually a good debate. The economic value of cloud computing needs to be studied carefully. Cloud computing is not the answer to all IT ills and if this market is to be successful, both the pros and cons must be well understood.

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G C Network

1 Comments

  1. James Colgan on April 17, 2009 at 8:48 pm

    We have to get away from the hype (and single company data samples!). Not all companies or applications should move over to the cloud. If you’re delivering more value, you should be charging more. Let’s keep the discussion rational and objective. See more on this discussion as it relates to a particular vertical – electronic design: http://tinyurl.com/cxfmuu